How we helped an Endowment Fund to design a performance scorecard to perform quantitative and qualitative analysis of a fund manager

April 5, 2023

The Context

The client, an Endowment Fund asked the TresVista team to create a performance scorecard to perform quantitative and qualitative analysis of any fund manager​. The analysis was a part of the standard due diligence process of underwriting a new fund and/or re-investing in an existing fund manager​. The client wanted comprehensive intel on each of the firm’s portfolio companies which can provide quick guidance in the initial due diligence process. The final deliverable was expected to generate actionable insights which can help in the due diligence process

The Objective

To design a performance scorecard to perform quantitative and qualitative analysis of any fund manager.

The Approach

The TresVista team followed the following process:
• The team had multiple discussions with the client and came up with metrics that could be considered while building the template
• The team performed desk research and started building the template
• Once the team had all the metrics, the workbook was divided into three segments: Data Input tabs, Calculation tabs, Output tabs. For segment, there were further tabs which were interlinked and made the whole template more dynamic

The Challenges We Overcame

The major hurdles faced by the TresVista team were:
• Developing an in-depth and comprehensive template and come up with the performance metrics​
• The information pertaining to the portfolio companies was not readily available in the dataroom provided by the client. The team spent considerable amount of time on research for the data relevant to analysis​
• Understanding the scoring criteria provided by the client and making a comprehensive list of various metrics (including asset class, loss ratio, investment pace etc.)​
• Another hurdle was to make the workbook more efficient and automated
The team carried out desk research and referred to the previous models the team had worked on to come up with the excel template. The team also scheduled regular calls and follow-ups with the client regarding the performance metrics. The team spent a considerable amount of time on research to find out the missing data relevant to portfolio company analysis. With time and regular discussions with the client, the team came up with the set metrics for different asset classes to rank the scorecard.

Final Product

The Value Add – Catalyzing the Client’s Impact

The TresVista team aimed to create a template that would be dynamic and catered to all types of fund managers (Buyout funds, Venture funds, etc.). Post discussion with the client, the team included a few qualitative aspects along with the quantitative ones and added a new tab related to summary of key terms, alignment between team members, portfolio companies’ operational milestones since inception, etc. The TresVista team helped to reduce the total hours to analyze one underwriting from 80 to 24 hours.